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Policies and Strategies for IncreasedBiomass and Bioenergy Use in the
United States
Helena Li ChumNational Renewable Energy Laboratory,
Golden, Colorado, USA
February 2002Conference on Sustainability in Energy Production and Utilization
in Brazil: The Next Twenty Years,UNICAMP, Sao Paulo, Brasil
Outline
• Context– R&D– Portfolio of incentives
• Retrospective of 25 Years• Role of Biomass, Bioenergy and
Biobased Products for aSustainable Future
USA Renewable Energy 2000
Energy Health
Defense
Carter BushReagan Clinton PresidentBush
197800.51.52.52.03.01.0 19931983NuclearOil, Gasand ShaleCoalRenewablesBudget Year1988
Billion Dollars (1999)
GeothermalHydroelectric and OtherBiomass Wind, Photovoltaicand Other Solar0.40.80.61.00.2
Billion Dollars (1999)Billion Dollars (1999)
19780
0.5
1.5
2.5
2.0
3.0
1.0
19931983
Nuclear
Oil, Gasand Shale
Coal
Renewables
Budget Year1988 1998
Bill
ion D
olla
rs (19
99)
1978
Geothermal
Hydroelectric and Other
Biomass and Biofuels
Wind, Photovoltaicand Other Solar
0
0.4
0.8
0.6
1.0
0.2
19931983Budget Year
1988 1998
Bill
ion D
olla
rs (19
99)
Bill
ion D
olla
rs (19
99)
Policy2b
Million Dollars (1999)
7819800501001502002501985TransportationUnallocatedFEMPIndustrialBuilding Technology19901995Budget Yearpolicy2d400600800200Advanced Clean Fuels (Coal)Advanced Research Technology (Coal)Clean Coal TechnologyAdvanced PowerSystems(Coal)Petroleum& SyntheticFuels
Million Dollars (1999)
policy2d
19780
400
600
800
200
19931983Budget Year
Advanced Clean Fuels (Coal)
Advanced Research Technology (Coal)
Clean Coal Technology
Advanced Power
Systems(Coal)
Petroleum& Synthetic
Fuels
Natural Gas
1988 1998
Mill
ion D
olla
rs (19
99)
Comparative U.S. DOE R&D Funding for Energy Technologies
Federal Financial Interventions and Subsidies in Energy Markets: Primary Energy. SR/01AF/99-03 Washington D.C., USA, Energy Information Administration, 1999. (www.eia.doe.gov/fuelrenewable.html); Federal Financial Interventions and Subsidies in Energy Markets1999: Energy Transformation and End Use. SR/01AF/2000-02 Washington D.C., USA, Energy Information Administration 2000. (www.eia.doe.gov/fuelrenewable.html)
12%RE $
$0
$20
$40
$60
$80
$100
$120
$140
77 79 81 83 85 87 89 91 93 95 97 99
Fiscal Year
Mill
ion
200
0 $
Biobased Products - includes Forest Products and Agriculture
Energy from Municipal Waste-EMW
Alcohol Fuels R&D & Market Development
Biomass, Biofuels, Biopower, Bioenergy
DOE Bioenergy and Biobased ProductsKey policies shifted periodically
• Reduce dependence ofenergy imports - mainly oil
• Resolve supply and demand imbalances with market forces &supporting government policies• Move to R&D role
• Increase renewable energy and energy efficiency priority• Cost-share R&D throughpublic-private partnerships
Carter BushReagan ClintonPresident
Land Plants Fresh waterPlants
Sea waterPlants
Technical Processes
BiologicalProcesses
Wolfdraw.cdr
BiologicalPhotosynthesis
TechnicalPhotosynthesis Photolysis
Hydrogen
Food
Agriculture Forestry Fishery
Feed ConstructionMaterial
Chemical RawMaterial
Wastes
Energy Resource
Biological Conversion
to More Desirable Fuel Form
Methane Hydrogen
DirectCombustion
Pyrolysis
Low Btu Gas
Heavy Oils Char
Hydrogenation
High Btu Gas Oil
Solar Energy
Wolf, M. (1974). Utilization of Solar Energy by Bioconversion - An Overview. Subcommittee on Energy, Washington, D.C., Congress of the United States: 2 - 23. Used to guide the NSF Research Applied toNational Needs that generated the programs onFuels from Biomass in FEA/ERDA/DOE (1974-1977)
1974
Biomass: 2000
Fuels
PrimarilyEthanol fromlignocellulosic
Heat, Electricity, Combined Heat and Power
ChemicalProductsForest/Paper
Products
Hydrogen from Renewables a Separate Program
BioenergyPathways - 2000
Resource Transformation Marketplace
Co-firing
&
Bioprocess
AdvancedTurbine
Fuel Cells
SNGDMEH2
Fischer TropschLiquids
Mixed AlcoholsMethanol
MTG
EthanolFermentation
Chemicals
Direct Combustion
LignocellulosicCrops orResidues
Electricity
Gasification
HydrolysisDedicatedCrops
Biomass Feedstocks – DOE/ORNL andCollaborators
Species Studied
1977-1983 1985 1991
>100 woody species
screened
25 woody species
experimentaltrials 2 woody
modelspeciesselected
35 herbaceous species
screened
1 herbaceous model
speciesselected
1984-1990
Time
Protein Engineering at DOE/NREL
•Discovery of thermal tolerantenzymes: cellulases and xylanases
• 2 - endoglucanase patents• 1 - β-D-glucosidase patent• 1 - dextranase patent• 1 - exoglucanase patent(filed)
A. cellulolyticus EI
B. Adney, M. Himmel 1996J. Sakon 1997
J. Sakon 1999J. Baker M. Himmel 1999
Ki EIwt = 2 mM CB
Ki EI245G = 30 mM CB
•Site Directed Mutagenesis–Acidothermus EI and T. reesei CBH I
Yellowstone Natl ParkProspecting early ’80sPermit #2621YELL
More than 200 peer reviewed papers20 patents and applications
Several awards
Systems ApproachesThe Salix Project
Location: Dunkirk and Geneva NY
Project Details 2 x 10.0 MW biomass additions to 100 MW coal fired boilers
Feedstocks: urban and wood residues increasing contribution of dedicatedfeedstock supply - hundreds of acres
salix
Environmental, Ecological, Institutional and Life Cycle
Biomass Power Life Cycle Greenhouse Gas Emissions
-600
-400
-200
0
200
400
600
800
1000
1200
-150
-100
-50
0
50
100
150
200
250
300
350
g C
O2-
equi
v / k
Wh
g C
arbo
n-eq
uiv
/ kW
h
DedicatedBiomass
IntegratedGasificationCombined
Cycle
AveragePulverized
CombustionCoal
Coal/biomasscofiring (15%)
Direct-firedBiomass ResidueCurrent industry
Natural gascombined cycle
Mann, M. K.; Spath, P. L. (2001). Comparison of the EnvironmentalConsequences of Power from Biomass, Coal, and Natural Gas. Kyritsis, S., et al.,eds. 1st World Conference on Biomass for Energy and Industry:Proceedings of the Conference held 5-9 June 2000, Sevilla, Spain. London, UK:James & James Ltd.; Vol. I: pp. 65-68
a
January 2001
Biomass ResearchAnd Development
Board Created in 1999
in responseto Executive Orderand the BiomassResearch and
Development Act of 2000.
Biomass R&D TechnicalAdvisory Panel started
in 2000See http://www.bioproducts-bioenergy.gov/
Increased FederalGovernment Coordination
From Inventory of FY98R&D Activities: $253 MiDOE + USDA = $228 Mi
DOE = $108 MiUSDA = $120 Mi
Key Agencies
Portfolio of Non-R&D Actions
• Payments either directly to consumers orproducers or indirectly through energy excisetaxes foregone;
• Reduced taxes through preferential tax rates,tax credits (R&D expenses offsetting taxes),tax deferrals, and income-reducing measures;
• Investment incentives such as acceleratedcapital depreciation;
• A variety of loan programs;• A number of voluntary programs with industry;• Use of the federal government purchasing
power to increase biomass and bioenergy use.
1971
500
0
1000
2000
3000
1500
2500
3500
Industry
Commercial
MSW & LFG
Residential
EthanolUtility
1975 1980
Year Biomassprimary
1985 1990 1995 1999
CleanAirAct
Amend.
1000 Peta Joules = 1 Exa Joule =0.95 Quads
OTA (1981). Energy from Biological Processes. Washington, D.C., Congress of the United States, Office of Technology Assessment: p 113. EIA (2000). Renewable Energy Annual 1999. DOE/EIA 0603(99) Washington D.C., USA, 117. (www.eia.doe.gov/fuelrenewable.html)
PublicUtility
RegulatoryPolicy
ActPURPA
Crude OilWindfallProfitsTax Act
EnergyPolicy
ActEPAct
TransportationEquity
Act
EnergyTax Act
EnergyConservation &Reauthorization
Act
BiomassR&DAct of2000
Examples of Bioenergy and Biobased ProductsFacilities
Bioenergy Electricity Generation, 1981 - 1997
0
2,000
4,000
6,000
8,000
10,000
12,000
1981 1983 1985 1987 1989 1991 1993 1995 1997
Year
Cap
acit
y, M
W
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Gen
erat
ion
, TW
h
←← →→
Ref: EIA, Annual Energy Review 1997, Renewable Energy Annual 1995
700,000 MWUS capacity
3,000 TWhUS generation
Brazil: 350 TWh; Portugal: 39 TWh; UK: 343 TWh
Bi kWh=TWh
$15 billion capital
66,000 jobs
IPP
PURPACreated
Market Certainty
California’s 20 years of BioPower
N
N
N
N
N
N
F
gas
Elec-tricityHeat
Fan
ElectricGenerator
StirlingBurner Gasif ier
F e e dSc rew
Fuel Bin
Stirling P C S
StirlingEng ine
Biomass
Gas i f ie r
GasClean-up
C o m b u s t i o nT u r b i n e
S team
H R S G
Gas ification Combined Cycle
Historical U.S. EthanolConsumption
0.00
0.02
0.040.06
0.08
0.10
0.12
1981 1984 1987 1990 1993 1996
Year
Ref: Energy Information Administration, http://www.eia.doe.gov/pub/energy.overview/aer98/txt/aer1003.txt
6-7 billion6-7 billionLitersLiters
1% gasoline1% gasoline
•• Capacity 2000 Capacity 20009 billion Liters9 billion Liters
•• 2010 projected 2010 projectedcapacitycapacity
12 billion Liters12 billion Liters
Ethanol in Ethanol in BrazilBrazil10-15 10-15
billion Litersbillion Liters
45 firms$3 billion invested
40,000 jobsReplaceReplaceMTBE?MTBE?
Quads
Ethanol and Corn TrendsPartial Waiver of Excise Taxes Continues Through 2007
Bioethanol Production
+ =
“Cooking”catalyst
+heat
+time
sugarsand
residualsolids
(lignin)
ethanolfermentationand recovery
ligninutilization(boiler fuel)
Decouple sugar cost from commodity food marketLower production cost
Alternative-Fueled Vehicles by Type - Year 2000
LPGCNGLNGMeOH 85%MeOHEtOH 85%EtOH 95%Electricity
Total Number: 432,000/220 million vehicles
EPAct 1992
Replacement of boilers at the equipmentReplacement of boilers at the equipmentreplacement time with integrated gasificationreplacement time with integrated gasificationcombined cycle could make the industry ancombined cycle could make the industry anexporter of up to 30GW by 2030exporter of up to 30GW by 2030
- RD&D- RD&D- support of demonstration- support of demonstration--1st of a kind commercial1st of a kind commercial
--Several conceptsSeveral concepts- Lower cost learning - Lower cost learning curve curve
Agenda 2020American Forest &Paper Association
EPA (2001). Basic Facts - Municipal Solid Waste, Office of Solid Waste Information. 2001.
www.epa.gov/epsoswer/non-hw/muncpl/facts.htm
Summary of Key Bioenergy FederalSubsidies -- 1999
Primarily used for ethanol –very effective in drivingincreased production. Thisrevenue loss is offset by lessdirect govt payment tofarmers due to increasedgrain consumption
$680-$725
Revenue loss estimatefor the partial exemptionfrom Excise Tax forAlcohol Fuels
-- Somewhat effectiveproduction credit
$15Alcohol Fuel Credit
Alternative fuel (non-conventional) productioncredit - effective
$4.0Internal Revenue Code,Section 29 Tax Credits
Wood residues & landfill gas.Year to year appropriation –considered less effective thanothers
$2.6Renewable EnergyProduction Incentive(direct expenditure)
Use/Uptake by Private
Sector*
Amount,
million 2000 $
Type
*EIA/SR/01AF/99-03, Federal Financial Interventions and Subsidies in Energy Markets 1999: Energy Transformation and End Use, 2000; Renewable Energy 2000: Issues and Trends, Feb 2001, DOE/EIA –0628 (2000).GAO/RCED-00-301R Tax Incentives for Petroleum and Ethanol Fuels, 2000
Tax Incentives for Ethanol Fuels CreatedMarket Certainty
$8.4-$10.5 billion(Treasury or Joint Committee onTaxation calculations)
1980-2000Alternative (non-conventional) FuelProduction Credit
$42-$54 billion(Treasury or Joint Committee onTaxation calculations)
1968-2000Petroleum industryexpensing of exploration anddevelopment cost
$82 billion1968-2000Petroleum industry excess ofpercentage over costdepletion
$198-$478 million(Treasury or Joint Committee onTaxation calculations)
1980-2000Income Tax Credits forAlcohol Fuels
$7.5 to $11 billion(Treasury or Joint Committee onTaxation calculations). Thisrevenue loss is offset by less directgovt payment to farmers due toincreased grain consumption
1979-2000Ethanol – Partial exemptionfrom the excise tax foralcohol fuels
Adjusted to2000$
Summed overYears
Tax IncentiveExpressed as FederalOutlay Equivalents
GAO/RCED-00-301R Tax Incentives for Petroleum and Ethanol Fuels, 2000
Foss
il Fu
els
Create targeted markets toincrease investment
• Commercial Market Potential– Renewable Portfolio Standard (RPS) for Electricity
Proposals at Federal level (not enacted) couldestablish a % of renewable electricity required byany company selling electricity in a competitivemarket (to have or buy from a company that hasexcess renewables -- tradable obligation)
– RPS enacted at several stateshttp://www.eren.doe.gov/state_energy/policy_content
– Renewable Fuel Standardproposals at the Federal level (not enacted) couldestablish % renewable fuel in the pool
States with Renewable Portfolio Standard
State Portfolio StandardConnecticut New Renewables: 0.5% by 7/1/2000 increasing by 0.25 %
each year through 7/2009.
Existing renewables increase from 5.5 percent to 7% by 2009.
Maine 30% standard.
Massachusetts 1% starting in 2003, increasing by 0.5% through 2009, and an additional 1% per year thereafter.
Nevada 0.2% and increasing to 1% by 2010, half of which is to come from solar power.
New Jersey 2.5% in 2000 increasing to 6.5% by 2012.
Pennsylvania 2% increasing by 0.5% annually subject to cost limitations.
Texas 2000 megawatts new renewable generating capacity by 2009 with 400 MW to be installed by 2003.
Arguments for Renewable Portfolio Standard
• Helps to diversify a state's energy supply.
• Promotes environmentally-benign forms of electricity.
• Creates initial market demand to help make fledgling industries viable.
Arguments Against Renewable Portfolio Standard
• Increases costs to consumers.
• Customers and the market should be able to select what types of electricity are produced, not mandates.
• The environmental benefits often accrue elsewhere rather than in-state.
• Provides an unfair market advantage to renewable energy technologies.
Outcomes of Government Actions 25 Years
• Primary Energy – doubled in 20 years• Electricity Production – tripled in 10 years• Ethanol Fuels Production – increased a factor of 16 in 20 years• Forest Products Energy Self-sufficiency increased by nearly
50% in 20 years.• Forest Products/Pulp and Paper Energy Intensity decreased initially and
resumed increase in the 1992-1998 period.• Overall Agriculture/Energy Interactions – complex (somewhat negative
for soybean and cattle; somewhat positive for poultry)• Municipal solid waste management --
– Safe and responsible.– Recycling rates tripled in 30 years.– Primary energy from MSW/landfills increased by a factor of
6 in 20 years.
• Significant emissions reductions, including carbon, and landfillreduction were achieved.
• Significant economic development including rural.
National Renewable Energy Laboratory
Operated for the U.S. Department of Energy by Midwest Research Institute • Batte lle • Bechtel
Bottom Line• Bioenergy - Biopower – Biofuels - Bioproducts
– Intersection of• Energy• Agriculture• Forestry• Environment• Regional/Municipal Residue Management• Chemical Industry Feedstocks• Economic Development
– Understanding and fostering important and productive interactions is key.– Outstanding scientific/technological progress
can help design sustainable integrated systems.
Policies, with multiple objectives to be achieved simultaneously,Policies, with multiple objectives to be achieved simultaneously,science, and technology can lead to sustainable use of the resourcescience, and technology can lead to sustainable use of the resource
References
• Helena L. Chum & Ralph Overend, “Biomass andBioenergy in the United States”, in press Advances inSolar Energy Conversion (2002)
• Fostering the Bioeconomic Revolution in BiobasedProducts and Bioenergy,http://www.bioproducts-bioenergy.gov
• Helena L. Chum & R. Costello, 2001). Overview ofPolicies and Strategies for Biomass and Bioenergy in theUnited States. Kyritsis, S., et al., eds. 1st WorldConference on Biomass for Energy and Industry:Proceedings of the Conference held 5-9 June 2000, SevillaSpain. London, UK: James & James Ltd; pp. 1248-1252
• Chum, H. L.; Overend, R. P. (2001). Biomass andRenewable Fuels. Fuel Processing Technology. Vol. 71(1-3), June 2001; pp. 187-195